Public works sector - PowerPoint Presentation

Slide1

Public works sector focus areas audit outcomes 2014-15Presentation to the Standing Committee on Appropriations15 April 2016

15 April 2016Slide2

Reputation promise/missionThe Auditor-General of South Africa has a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, exists to strengthen ourcountry’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby

building public confidence

.Slide3

2014-15

PFMA

Discussion points

3

History of

public works focus

areas audited

Public works sector

focus areas audit outcomes

Root causes

Sector challengesSlide4

2014-15

PFMA

SECTOR FOCUS AREAS (History)

4Slide5

FOCUS AREASSector focus areas

2014-15

2013-14

2012-13

Management of accommodation for client departments

a

a

a

Project management of infrastructure projects

a

a

a

Expanded public works programme

a

a

a

2014-15

PFMA

5Slide6

2014-15

PFMA

1

Focus area 1: Management of accommodation for client departments

1

6Slide7

2014-15

PFMA

Findings on

Management of accommodation for client departments

7Slide8

2014-15

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2

Focus area 2:

Project management of infrastructure projects

2

8Slide9

2014-15

PFMA

Findings on

Project management of infrastructure projects

9

No findings

New findings

Repeat findings

Improved

Regressed

Stagnant or limited progressSlide10

2014-15

PFMA

3

Focus area

3:

Expanded Public Works Programmes

3

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2014-15

PFMA

Findings on

Expanded Public Works Programmes

11

No findings

New findings

Repeat findings

Improved

Regressed

Stagnant or limited progress

No material findings were noted at provincial departments with regards to accounting for the Expanded Public Works Programme integrated grant for provinces; however challenges were encountered when verifying the reliability of reported performance of the EPWP.

This

was attributable to two factors.

Inadequate records management and retention by implementing bodies and deficiencies in the information system being used for reporting.

Based

on the audit of EPWP projects across the country, we were unable to obtain sufficient appropriate supporting documentation to substantiate the creation of work opportunities reported for a large number of the projects in our sample

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2014-15

PFMA

Findings on

Expanded Public Works

Programmes (

cont

…

12

No findings

New findings

Repeat findings

Improved

Regressed

Stagnant or limited progress

Furthermore

, various control weaknesses around input validation controls and overall performance reporting were identified in the Integrated Reporting System (IRS). The IRS was used by the National Office to report on work opportunities created nationally, however as a result of the system shortcomings performance data reported was not in all instances accurate, valid and complete. Slide13

2014-15

PFMA

Findings on

Expanded Public Works

Programmes (

cont

…

13

No findings

New findings

Repeat findings

Improved

Regressed

Stagnant or limited progress

The following exceptions were identified.

Work

opportunities overstated due to deceased

beneficiaries

reportedBeneficiaries

on reporting system with invalid identity numbers, thus validity of the affected beneficiaries could not be corroborated with adequate supporting documentation in the form of identity document

.

Beneficiaries paid below minimum wage resulted in non-compliance with the ministerial determination issued by the department of labourSlide14

Public works sector budget

Budget

For the 2014-15 financial year, the

Public works sector

budget

was

R32,3 billion

2014-15

PFMA

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2014-15

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Root

Causes

4

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2014-15

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Root causes should be addressed

Root

CausesSlide17

Root causes should be addressed (top three)17

2014-15 PFMA

Root causes

Recommendation

Slow response in addressing the root causes of audit findings

Compilation of audit action plans addressing all material audit findings, these plans should contain deadlines and milestones as well as the party responsible for implementation. Consideration should be given to including responsibilities in performance contracts of relevant parties to ensure accountability.

Leadership in departments to drive and monitor implementation of corrective actions proposed

Internal audit to verify accuracy, completeness and validity of progress reported on action plans. Progress should be communicated to the Audit Committee and Portfolio Committee to enable oversight regarding the progress of resolving critical audit findings reported.

Key positions vacant or key officials lacking appropriate competencies

Stabilisation of leadership and appointing appropriately skilled officials in key positions should be expedited at remaining affected departments.

The sector should determine the ideal ratio of project managers to projects and in line with this devise a strategy to ensure that all departments in the sector appoint project managers with the necessary credentials to bridge the existing gap. Slide18

Root causes should be addressed (top three) cont

…

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2014-15 PFMA

Root causes

Recommendation

Weaknesses

of

Policies and Procedures

Policies and procedures should be established or enhanced (where it already exist) to monitor and satisfy the accommodation needs of user departments. Furthermore, it should address all aspects surrounding conditional assessment and monitoring of the level of utilisation of all properties (state-owned and leased).

Adherence to these policies will assist in compiling feasible planned maintenance strategies (including the addressing of the maintenance backlog) and enabling the departments to identify all vacant, unused land and office buildings. Thus enabling optimal utilisation of the state-owned property portfolio and avoiding fruitless and wasteful expenditure.

The National Department of Public Works must provide the required oversight to ensure that policy consistency is achieved in the sector for cross cutting focus areas.Slide19

2013-14

PFMA

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Challenges

facing

Public works

sector

5

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Challenges facing Public works sector Poor coordination between the public works sector and client departments meant that accurate accommodation needs could not be established

.

Inability of certain departments to establish the condition, and therefore availability, of suitable state-owned properties for accommodation.

the

quality and monitoring of projects are not in all instances of the desired standard.

Effective, efficient and economic lease management is still a challenge in the sector.

Capacity constraints remained a challenge for the sector. This was mainly caused by difficulties to attract and retain people with the right skills and experience to effectively and efficiently manage infrastructure projects.

Budgetary

constraints played a part as well, given the more competitive remuneration being offered by the private sector to critical resources for example engineers, architects and project managers. Slide21

6. Consolidated audit outcomes for the education sector

Auditee

Outcomes

(2014/15)

Outcomes

(2013/14)

Movemen

t

Audit Opinion

PDOs

Non-compliance with laws and regulations

Audit Opinion

PDOs

Non-compliance with laws and regulations

National

Unqualified with findings

Yes

Yes

Unqualified with findings

Yes

Yes

Eastern Cape

Qualified

Yes

Yes

Qualified

Yes

Yes

Free

State

Unqualified

without

findings

No

No

Unqualified with findings

Yes

Yes

Gauteng

Unqualified with findings

Yes

Yes

Unqualified with findings

Yes

Yes

KwaZulu-

Natal

Unqualified with findings

No

Yes

Unqualified with findings

No

Yes

Limpopo

Qualified

Yes

Yes

Qualified

Yes

Yes

Mpumalanga

Unqualified with findings

Yes

Yes

Unqualified with findings

Yes

Yes

Northern Cape

Unqualified with findings

Yes

Yes

Unqualified with findings

Yes

Yes

North

West

Qualified

Yes

Yes

Qualified

Yes

Yes

Western

Cape

Unqualified without findings

No

No

Unqualified without findings

No

NoSlide22